Opportunities and challenges surrounding financial models for high-investment medications: A survey of access decision-makers and employers

BACKGROUND: As an increasing number of cell and gene therapies are US Food and Drug Administration approved, health care stakeholders are attempting to strike a balance between patient access to innovative treatments and overall affordability. Access decision-makers and employers are evaluating how implementation of innovative financial models can support coverage of high-investment medications. OBJECTIVE: To understand how access decision-makers and employers are using innovative financial models for highinvestment medications. METHODS: A survey was conducted with access and employer decision-makers recruited from a proprietary database of market access decision-makers from April 1 to August 29, 2022. Respondents were asked about their experiences using innovative financing models for high-investment medications. RESULTS: Across both stakeholder segments, stop-loss/reinsurance was the most utilized financial model, with 65% of access decision-makers and 50% of employers currently using this financial model. More than half (55%) of access decision-makers and nearly one-third of employers (30%) currently use a provider contract negotiation strategy, with similar percentages of access decision-makers (20%) and employers (25%) planning to implement this strategy in the future. Aside from stop-loss/reinsurance and provider contract negotiation, no other financial models exceeded 25% penetration in the employer market. Subscription models and warranties were the least common models currently used by access decision-makers (10% and 5%, respectively). The greatest growth for access decision-makers is expected for annuities, amortization or installment strategies, outcomes-based annuities, and warranties, with 55% of access decision-makers planning to implement each. Few employers are seeking to implement new financial models in the next 18 months. Both segments prioritized financial models that can address the actuarial or financial risk arising from uncertainty in the number of patients likely to be treated with a durable cell or gene therapy. Many access decision-makers cited a lack of opportunities from manufacturers as a reason for not using a model, whereas employers also identified lack of information and financial viability as reasons for not using a model. In most cases, both stakeholder segments prefer to work with current partners as opposed to a third party when executing an innovative model. CONCLUSIONS: Access decision-makers and employers are adopting innovative financial models as traditional management techniques are insufficient to manage the financial risk associated with highinvestment medications. Although both stakeholder segments see a need for alternative payment models, they also recognize the challenges and complexity associated with their implementation and execution of these types of partnerships.


RESULTS:
Across both stakeholder segments, stop-loss/reinsurance was the most utilized financial model, with 65% of access decision-makers and 50% of employers currently using this financial model. More than half (55%) of access decision-makers and nearly one-third of employers (30%) currently use a provider contract negotiation strategy, with similar percentages of access decision-makers (20%) and employers (25%) planning to implement this strategy in the future. Aside from stop-loss/reinsurance and provider contract negotiation, no other financial models exceeded 25% penetration in the employer market. Subscription models and warranties were the least common models currently used by access decision-makers (10% and 5%, respectively). The greatest growth for access decision-makers is expected for annuities, amortization or installment strategies, outcomes-based annuities, and warranties, with 55% of access decision-makers planning to implement each. Few employers are seeking to implement new financial models in the next 18 months. Both segments prioritized financial models that can address the actuarial or financial risk arising from uncertainty in the number of patients likely to be treated with a durable cell or gene therapy. Many access decision-makers cited a lack of opportunities from manufacturers as a reason for not using a model, whereas employers also identified lack of information and financial viability as reasons for not using a model. In most cases, both

Plain language summary
The US Food and Drug Administration (FDA) has approved several treatments that can treat certain diseases with a one-time dose, which often come with a high up-front cost. As a result, insurance companies and employers are looking for new ways to pay for these drugs. Examples include spreading the cost over time or not paying the full amount unless the patient responds to treatment. This study describes how insurance companies and employers are changing how they pay for one-time treatments.

Implications for managed care pharmacy
As health care stakeholders face an increasing number of FDA approvals for cell and gene therapies, they recognize the need to evolve current financing models to support sustainable reimbursement of high-cost treatments. This study evaluated current, short-term, and long-term uptake of innovative financing models by both access decision-makers and employers and identified limitations that have hindered uptake. Despite the complexity of new models, there is growing interest for solving the challenges associated with high-cost treatments.
up-front cost that are expected to have a benefit over time, such as cell and gene therapies. Insurers and employers have traditionally used reinsurance and stop-loss, respectively, to limit exposure to shock claims but may need to reevaluate its role for gene and cell therapies. 6 Emerging models include performance or outcomes-based contracts that link payment to the clinical performance of a therapy over time, which allows manufacturers to share in the risk related to uncertainty around clinical outcomes. Annuity/amortization models that spread a fixed cost over time, as opposed to paying the full cost of a one-time treatment up front, may help to solve the challenges associated with a high initial cost. Other contractual models are being developed that allow an entity to delegate the risk, coverage, management, and even care coordination to a third-party entity in exchange for a premium. Stakeholders are also considering enlisting the support of a third party to support contract negotiation with either manufacturers or provider networks. Other emerging models include warranties, which are manufacturer-purchased policies that reimburse for suboptimal clinical performance, and subscription models, in which manufacturers provide treatment for a set fee regardless of the number of patients treated. These various models seek to address the financial, clinical, and actuarial challenges associated with high-investment medications such as cell and gene therapies. 7 To better understand how access decision-maker and employer stakeholders are responding to the financial challenges associated with high-investment medications, a survey was administered to understand the current uptake of various models and describe the challenges faced during implementation and execution of these models. The results of this survey were discussed during a Partnership Forum that AMCP convened in April 2022 with various stakeholders to develop solutions and recommendations for addressing identified challenges related to patient access to high-investment medications. 8

Methods
Participants were recruited via email from a proprietary database developed and owned by PRECISIONvalue, consisting of more than 9,000 managed care decision-makers and health care stakeholders. A screener question was included to limit the survey to individuals with responsibility or influence for decisions related to the financing of high-investment medications for their respective organization. The survey was fielded using the Qualtrics platform from April 1 to August 29, 2022.
Survey questions were developed to identify the key financial models (Supplementary Table 1, available in online stakeholder segments prefer to work with current partners as opposed to a third party when executing an innovative model.

CONCLUSIONS:
Access decision-makers and employers are adopting innovative financial models as traditional management techniques are insufficient to manage the financial risk associated with highinvestment medications. Although both stakeholder segments see a need for alternative payment models, they also recognize the challenges and complexity associated with their implementation and execution of these types of partnerships.
The introduction of clinically transformative treatments-such as cell and gene therapies-has the potential to significantly alter the treatment approach and improve outcomes for many patients with chronic conditions. In the last 5 years, the US Food and Drug Administration (FDA) has approved several gene therapies (eg, betibeglogene autotemcel, onasemnogene abeparvovec-xioi, and voretigene neparvovec-rzyl), as well as multiple chimeric antigen receptor T-cell therapies (eg, tisagenlecleucel, axicabtagene ciloleucel, and idecabtagene vicleucel). 1 With a robust pipeline of approximately 1,300 gene therapy, cellbased immunotherapy, and cell therapy candidates under investigation, health care stakeholders are anticipating a significant number of these agents coming to market in the next decade. 2,3 Although cell and gene therapies offer the potential for a one-time treatment to address a chronic disease, these products come at a high up-front cost. Many of the initial products to be FDA approved were indicated for extremely small patient populations with variable distribution patterns, making it difficult for access decision-makers to accurately predict the budget impact. As more cell and gene therapy products come to market-including treatments for more prevalent conditions-it may not be possible for insurers and employers to absorb the cost, even with utilization management in place that limits treatment to appropriate patients. Additionally, the one-time dosing and significant up-front cost associated with cell and gene therapy products presents a challenge for access decisionmakers and employers, especially with uncertainty related to magnitude of clinical benefit and durability over time. Innovative financing models likely will be required to support affordability and sustainability across stakeholders, as well as patients and providers as they seek to access to these transformative therapies. 4,5 Access decision-maker and employer stakeholders are exploring innovative models to support sustainable reimbursement and patient access to high-investment medications, which are defined as treatments with a high Opportunities and challenges surrounding financial models for high-investment medications: A survey of access decision-makers and employers article) being used to maintain affordability of high-investment medications. The survey consisted of a total of 15 questions. Information about each participant's organization type, role, covered lives (for access decision-makers), and employees (for employers) was available from the PRECISIONvalue database. The survey was double-blinded, and participation was voluntary. Survey respondents received an honorarium for participation.
In the survey preamble, "high-investment medications" were defined for participants as "treatments with a high up-front cost [that] are expected to have a benefit over time (e.g., cell and gene therapies)." The survey objectives were to assess 12 types of financial models being used to pay for high-investment medications, the attributes driving adoption of these models, and barriers restricting adoption of these models. Respondents were asked to indicate whether each strategy was currently in use, planned for short-term implementation (within the next 18 months), or planned for long-term implementation (beyond 18 months) or whether there were no plans to implement the strategy. The full survey instrument is available from the authors upon request.

RESPONDENTS AND DEMOGRAPHICS
The survey instrument was sent to 1,562 members of the PRECISIONvalue proprietary database. Responses were requested until the maximum number of 40 respondents was reached. All 40 respondents completed the survey. Twenty respondents represented access decision-makers, which included 5 respondents each from national health plans, regional health plans, the payer components of integrated delivery systems, and pharmacy benefit managers (PBMs) (Supplementary Table 2). Seven access decisionmaker respondents were medical directors, and 13 were pharmacy directors. The employer segment comprised 20 respondents, including 10 employers, 5 employee benefit consultants, and 5 employer coalitions. Employer respondents included 7 pharmacy directors, 7 benefits directors, 4 executives, and 2 medical directors. Health plan respondents (ie, national and regional health plans) and employer respondents recruited from the database represented a total of 110 million covered lives and 675,000 total employees, respectively (PBM and other subsegments were excluded from these counts to avoid double-counting of covered lives).

USE OF FINANCIAL MODELS FOR HIGH-INVESTMENT MEDICATIONS
Three-quarters of respondents have at least 1 of the financial models currently in place. Access decision-makers had higher levels of use compared with employers across all financial models (Figure 1). Across both access decisionmakers and employers, stop-loss/reinsurance was the most utilized financial model, with 65% of access decisionmakers and 50% of employers currently using this financial model. The remaining 35% of access decision-makers have plans to implement reinsurance, either within (10%) or beyond 18 months (25%). Whereas 20% of employers expect to implement stop-loss, nearly one-third (30%) have no plans to implement this financial model.
Provider contract negotiation was the next most common financial model for both types of stakeholder. More than half (55%) of access decision-makers and nearly one-third of employers (30%) currently use a provider contract negotiation strategy to manage costs of high-investment medications, with similar percentages of access decisionmakers (20%) and employers (25%) planning to implement this strategy in the future. However, whereas 25% of access decision-makers have no plans to implement this model, 45% of employers have no plans at all.
Outcomes-based rebates, risk carve-outs, and contract negotiation/management rounded out the top 5 most commonly used models for both access decision-makers and employers. Aside from stop-loss/reinsurance and provider contract negotiation, no other financial models exceeded 25% penetration in the employer market. Subscription models and warranties were the least common models currently used by access decision-makers (10% and 5%, respectively). No employers acknowledged using warranties or outcomes-based annuities.
The adoption of financial models is expected to increase more among access decision-makers compared with employers in both the short and long term. In the next 18 months, a quarter of access decision-makers expect to adopt milestone-based contracts, contract negotiation management, outcome-based annuities, Orphan Reinsurer Benefit Managers (ORBMs), and warranties to pay for high-investment medications. When combining access decision-makers who anticipate implementation in either the short or long term, the greatest growth is expected for annuities, amortization, or installment strategies, outcomes-based annuities, and warranties, with 55% of access decision-makers planning to implement each. By contrast, employers expect to deploy these financial models more slowly. Just 35% of employers are planning to implement new financial models in the next 18 months compared with 75% of access decision-makers. In this segment, performance-or outcomes-based contracts have the greatest potential for growth long term, with 35% of employers indicating they have implementation plans beyond 18 months.

Opportunities and challenges surrounding financial models for high-investment medications:
A survey of access decision-makers and employers models, with 2 having implemented at least 10 types of financial models.

KEY ATTRIBUTES OF FINANCIAL MODELS FOR HIGH-INVESTMENT MEDICATIONS
Access decision-makers and employers were also asked to rank the importance of 10 attributes of financial models. Both segments prioritized financial models based on Across both access decision-makers and employer segments, 33 of 40 respondents (83%) plan to implement at least 1 financial model for high-investment medications in either the short or long term. Of these respondents, 7 (18%) are considering 1-2 models, 12 (30%) are considering 3-4 models, and 14 (35%) are considering 5 or more models. Notably, of the 7 respondents with no plans to implement any model, 4 have already implemented at least 3 financial

FIGURE 1
Current

Opportunities and challenges surrounding financial models for high-investment medications: A survey of access decision-makers and employers
a model's ability to address the actuarial or financial risk arising from uncertainty in the number of patients likely to be treated with a durable cell or gene therapy. Thirty percent of each segment ranked this as the top attribute; 80% of access decision-makers ( Figure 2A) listed actuarial risk management in their top 3, compared with 60% of employers ( Figure 2B). In the access decision-makers segment, 30% of respondents ranked the cost of the financial model as the top attribute and 50% cited cost in their top 3, compared with 5% of employers who ranked cost first. Contract administration was ranked second for employers, with 20% citing this as their highest priority attribute and 50% selecting it in their top 3. Access decision-makers did not value contract administration as highly as employers, with only 5% naming it as their most important attribute.

Discussion
The results of this survey demonstrate how access decision-maker and employer stakeholders are shifting their approach to payment for high-investment treatments such as cell and gene therapies and embracing new financing and management models. Although most access decisionmakers and employers are predominantly using models that are familiar to them (eg, stop-loss and reinsurance), the unique financial and actuarial challenges posed by cell and gene therapy have driven these entities to explore emerging means of financing and coordination. The plurality of models adopted across both access decision-makers and employer stakeholders suggests that these entities are pursuing a multipronged approach to cell and gene therapy, using price negotiation, third-party reinsurance, installment payments, and outcomes-based risk to support the affordability of these products. However, the complexity of these models poses significant operational, logistical, and contractual challenges, which has impacted uptake to date. Current and anticipated levels of adoption in the present study suggest that both stakeholder types find value in overcoming these hurdles. The results of this survey indicate that access decisionmaker stakeholders are increasingly interested in models that amortize the cost of a cell or gene therapy, such as annuities or outcomes-based annuities. Within this survey, many access decision-makers noted that a primary barrier to adoption was lack of opportunity from manufacturers, suggesting that they anticipate additional opportunities may lead to increased uptake as more cell and gene products enter the market. Additional challenges identified through free response options were patient portability, as well as the creation of a liability for the pharmacy budget. The expected increase in annuity-based models aligns with access decision-makers' priority to mitigate risk and foster predictability in pharmacy benefit costs. However, additional research may be warranted to understand whether the increase is driven primarily by a perceived need related to cell and gene therapies, availability of solutions for the challenges associated with annuity-based payments, or both.
Based on response to this survey, employer respondents appear to lag behind access decision-maker stakeholders, in terms of both current and future use of new financial models, which may suggest they are taking a more conservative approach initially or looking to access decision-makers to take the lead. Employer adoption of all models trails current access decision-maker adoption, with no employers currently using warranty or outcomes-based annuity models compared with 5% and 25% of access decision-makers, respectively. Although current use of

BARRIERS TO ADOPTION
Each respondent was asked to identify the primary barrier to adoption of each financial model for which their organization had no implementation plans (Figure 3). Subscription models, ORBMs, and warranties were the financial models for which the fewest access decision-makers have implementation plans. Among the 60% of access decisionmakers with no plans to implement subscription models, the most common barrier was that manufacturers have not approached access decision-makers with this financial model. Lack of manufacturer engagement was also the primary barrier for most of the access decision-makers with no plans to pay for high-investment medications via ORBMs or warranties. Generally, access decision-makers did not consider lack of financial viability to be a financial barrier to most models, except for contract negotiation.
In the employer segment, the barriers to adoption were more evenly distributed among lack of information, financial viability, and manufacturer engagement. Subscription models and warranties had the highest rates of employers with no plans to implement. Approximately one-third of nonimplementers do not consider subscription models to be financially viable, and approximately one-third do not have sufficient information about this model. For warranties, approximately one-third have not been approached by a manufacturer. Interestingly, although most employers either have adopted or plan to implement stop-loss, most organizations with no plans to implement do not consider this model financially viable.

PARTNERSHIP OPPORTUNITIES
When considering partners and vendors to support execution of innovative financial models, both employers and access decision-makers primarily rely on existing partnerships as opposed to a separate third party. For both contract implementation and contract negotiation, 85% of access decision-makers preferred to work with an existing partner. Most employers also prefer existing partners for contract negotiation (65%) and contract implementation (60%). For the downstream components of data sharing and payment process, there was a slight uptick in preference for use of a separate third party for both access decision-makers and employers. When considering data sharing, 70% of access decision-makers preferred to use an existing partner, compared with 20% who preferred a third party, and 10% had no preference. Nearly two-thirds (65%) of access decisionmakers preferred to leverage an existing partner for payment process, compared with 20% that preferred a third party and 15% with no preference. Thirty percent of employer respondents preferred a third party for data sharing and 20% preferred a third party for the payment process.
Opportunities and challenges surrounding financial models for high-investment medications: A survey of access decision-makers and employers n = 20 access decision-makers; n = 20 employers, employee benefit consultants, and coalitions. Question: What is the primary reason that you are not planning to utilize this financial model?  Opportunities and challenges surrounding financial models for high-investment medications: A survey of access decision-makers and employers it may be helpful to explore the impact that the use of each innovative model has on formulary and access decisions, as well as on employer coverage and benefit design decisions. Finally, other perspectives to understand are those of the patient and provider, and how uptake of different financing models impacts the care delivery process, as well as cost exposure for the patient and provider.

LIMITATIONS
Several limitations apply to our findings. First, these findings are based on a small sample size with disparate covered lives. Although the sample included the same number of access decision-maker and employer organizations, access decision-makers represented more than 110 million covered lives, whereas employers represented less than 1 million. However, each respondent's answers received the same weight when tabulating results, even though a national plan's adoption of a financial model may impact more lives than all employers combined. Furthermore, although employers and access decision-makers are traditionally assessed in terms of the number of covered lives, it is harder to ascertain the market impact represented by a respondent from a health system, employee benefit consultant, or employer coalition, and respondents from PBMs may overlap with covered lives from regional health plans. Therefore, these findings should be interpreted as just one way to understand the prevalence and growth of emerging payment strategies. Second, because of the small sample size, comparisons between access decision-maker and employer segments are not statistically significant, and intragroup differences (eg, between regional and national plans) may have an outsized effect on the aggregated results. Finally, the data presented here are based primarily on closed-ended questions, which may not capture emerging financial strategies that were not offered as a prepopulated option.

Conclusions
Access decision-makers and employers both acknowledge that traditional spend and trend management strategies such as volume-based rebates are insufficient to manage the financial and actuarial risk posed by high-investment medications. Although both segments face cost pressure from these medications, access decision-makers are leading the way with higher levels of current and planned adoption across most financial models. As high-investment drug products continue to enter the market, both access decision-makers and employers will gain experience with a wide range of financial models, and the market will develop clearer insights into the long-term viability of these models for covering innovative high-cost therapies.
an outcomes-based payment financial model is low for employer stakeholders at 5%, this model has the highest potential in the future with 40% of respondents indicating plans to implement, consistent with access decision-maker respondents. Outcomes-based models, which shift risk from the purchaser to the manufacturer, are appealing to access decision-makers and employers but can be particularly challenging to align upon and adjudicate outcomes. The high percentage of long-term planned adoption for outcomes-based payments is likely a testament to this operational difficulty. In addition, the results of this survey indicate that employer stakeholders are more likely than access decisionmakers to have no plan to implement any of the financial models presented. Many employers noted that the models presented are not financially viable or employers have not been provided sufficient information. This suggests employers will continue to look to their health care vendors and benefits consultants for expertise, guidance, and experience in using new financial models before considering implementation for their own membership. Future research may be able to identify how employer perceptions of these financial models evolve as payer and employer adoption of novel financial models grow.
Overall, the high percentage of organizations that are exploring multiple model types suggests a widespread interest in payment innovation in this space, rather than limited interest in 1 or 2 specific models. The high level of current adoption among organizations with no future plans to adopt may suggest that these organizations' needs are being met by the financial models they have already implemented.
Both access decision-maker and employer respondents cited a lack of information and/or opportunities from manufacturers, suggesting there is a need for increased education and communication between manufacturers and their customers as it relates to innovative payment models. As access decision-makers and employers consider the advantages and disadvantages of the various options, it may be helpful for partners to provide real-world examples and case studies demonstrating how certain models have been implemented successfully and how certain challenges have been overcome. These examples may also help access decision-makers and employers determine which types of partnerships may be most beneficial for their organizations.
Future research may begin to identify attributes of financial models that are better suited for one therapy over another. For example, a subscription-based model provides benefits to treating a larger patient population at a consistent cost to the plan; however, it may have limited utility for a gene therapy where patient incidence is low. Additionally,